Landlords can be held liable in limited circumstances under federal law when a tenant racially harasses another tenant, a federal appeals court has ruled.

In the 2-to-1 split decision on Dec. 6, the 2nd U.S. Circuit Court of Appeals said landlords can be liable if it is proved they refused to address a racially hostile housing environment created by one tenant targeting another.

A dissenting judge, though, warned that the ruling steers housing law into uncharted territory with “deleterious consequences for parties, courts, and the housing market.”

The decision restores a lawsuit brought against a Long Island apartment complex by a Black man who was repeatedly subjected to racial slurs by a neighbor in Kings Park, a mostly White Suffolk County community east of New York City with a Black population of 1%.

The majority opinion written by Circuit Judge Raymond J. Lohier Jr. said a landlord may be held liable in limited circumstances under the Fair Housing Act of 1968, part of civil rights legislation passed in the wake of the assassination of Martin Luther King Jr.

“With the objective of building a racially integrated society in mind, it would make no sense for Congress to require landlords to rent homes without regard to race but then permit them to harass or otherwise discriminate against tenants because of race,” the Manhattan court said.

As an example, the decision said, a landlord might violate the Fair Housing Act if it fines tenants for creating fire hazards or littering but “watches silently as White tenants burn a cross or dump trash in front of the home of recently arrived Black tenants.”

The appeals court noted that the only other federal appeals court to confront a similar case was the 7th U.S. Circuit Court of Appeals in Chicago, which ruled in a lawsuit brought over alleged harassment of a senior citizen living in a senior facility.

In a dissent, Circuit Judge Debra Ann Livingston said the case calls on the courts to decide whether the Fair Housing Act imposes a duty on landlords not only to avoid discriminating but also to stop the harassing behavior of tenants.

She said the majority’s decision has no support in the law’s text, the court’s precedent or the principles Congress followed in enacting the law.

Livingston wrote that the 2nd Circuit was taking the law to a place “where courts improbably discover new causes of action in half-century-old provisions.”

The judge noted that under New York law, even repeated complaints to a landlord by tenants about a tenant who eventually stabbed a neighbor were insufficient to hold the landlord liable.

“Just as landlords lack the capacity of employers to monitor their tenants, they ordinarily lack the tools to investigate and re-mediate tenant misconduct when it is reported,” Livingston said.

“From now on, any landlord who fails to intervene following a tenant’s complaint of another tenant’s harassment on the basis of a protected ground is vulnerable to an FHA claim,” she said.

“This decision may benefit law firms and insurance companies, which sometimes profit from legal anomalies. But the winners today will not include those in pursuit of fair housing, and certainly not the renters among them, who will likely be left to foot the bill,” the judge added.

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